Every year during India’s monsoon season, the Mithi River swells into a brown, fast-moving force that courses through the heart of Mumbai, the country’s financial capital and second-largest city. Roads disappear under water. Cars are stranded. Entire neighborhoods almost shut down.
For years, the deluge damaged Equinox Business Park, a sprawling campus larger than seven football fields that’s built along the river’s flood plain. Basement pumps would fail, and water would seep into the grounds. Repeated flooding deterred tenants, with occupancy languishing at 16%.
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Then Brookfield Asset Management Ltd. bought Equinox in 2018. The New York-based company spent $26 million raising low-lying sections of the site, strengthening flood defenses and upgrading drainage systems, according to an estimate from a person familiar with the project who was granted anonymity to discuss private financial data.
Today the corporate headquarters of India’s Leela Palaces Hotels & Resorts Ltd., an outpost of Boston-based financial giant State Street Corp. and other tenants occupy more than 99% of Equinox. Last year, Brookfield sold a 97% stake in Equinox to Singapore’s sovereign wealth fund, GIC Pte., valuing the office park at almost 40 billion rupees ($420 million). Brookfield investors more than tripled the value of their equity in the property. The flood-protection measures enabled them to reap a premium in the sale, says the person close to the deal.
This transformation reflects a broader shift unfolding across India’s $300 billion real estate market. As floods, storms and extreme rainfall become more frequent, climate resilience is emerging as a new measure of value. From the vulnerable coastlines of Mumbai and Chennai to the flood-stricken office districts of Bengaluru and Gurgaon, investors are pouring money into drainage systems, flood barriers and surrounding infrastructure to protect rental income and preserve asset values — in some cases, paying for projects such as roads that are normally the responsibility of governments.
The result is a repricing of urban India and a gradual redrawing of the country’s investment map, as capital migrates toward buildings that can withstand a hotter, wetter and more unpredictable climate. At a news conference in July, Arpit Agrawal, a Brookfield managing partner who heads its India and Middle East infrastructure group, said the company had commissioned a study to assess whether land it was considering for a data center could be prone to flooding and ended up choosing another location because of the results. “Climate risk informs our investment thesis,” said Agrawal, whose group is separate from the company’s real estate practice.
The 2005 Mumbai flood, which killed more than 1,000 people, still haunts India. It remains the country’s costliest natural disaster, resulting in $500 million in claims that year, according to reinsurer Swiss Re AG. The company estimates that a repeat could set insurers back as much as $2.3 billion and envisions that other flooding scenarios could be even worse; what’s more, over the past two decades, individual events costing $1 billion have become increasingly common. Last week, India put many of its northern states on high alert after catastrophic flash floods swept through neighboring Nepal.
